Ownership Structure,Cross-border Acquisition, And Risk-taking

In the wake of the financial crisis in 2008,the academic community of finance has been deeply aware of the importance of improving the governance of commercial banks and other financial Institutional Firms and reducing the risks of commercial banks.At the same time,the research on the corporate governance of commercial banks are arisen in China and the world.The ownership structure is the foundation of corporate governance of commercial banks,guide commercial banks corporate governance mechanism and the business strategy fundamentally,so it is generally viewed as one of the important factors affecting bank risk-taking.This paper uses the theories of agency cost,executive moral hazard and social cost to analyze how the different ownership structure will affect the commercial bank’s risk-taking.For the mechanism of the impact of strategic investment on the risk-taking,this paper uses the learning effect and monitoring theory from the perspective of the principle to explain why the strategic investment in commercial banks may have an impact on the risk.This paper uses the panel data construction Random-effect model of 79 Chinese banks from 2009 to 2015 to study the relationship between ownership structure and the risk of commercial banks.In the other words,we will study whether there is a significant difference between the risk of Chinese banks and foreign banks.The study found that the overall risk of Chinese banks is higher than that of foreign banks,which is reflected in the fact that the asset risk of Chinese banks is higher than that of foreign banks.In the Big five,Joint-stock banks and City commercial banks,compared with the highest level of asset risk in city commercial banks.In addition,the bankruptcy risk of Chinese banks is higher than that of foreign banks.In the three types of Chinese banks,the bankruptcy risk is the highest.On this basis,this paper uses the difference-in-difference model(DID)to study whether the strategic investment will affect the commercial banks’ risk.The study found that in the commercial bank which proportion of foreign strategic investors holding lower shares,foreign strategic investors will not cause a significant impact on risk-taking of commercial banks;In the commercial bank which foreign strategic investors holding a higher proportion of shares,the foreign shareholders are actively improving the corporate governance structure and reduce bank risk,improve bank performance.According to the above conclusions,we supposed that we should reduction the agency cost,solve the problem of the absence of the owner of state-owned enterprises,promote the share trading reform,accelerate the deepening cooperation with foreign strategic investors and bank supervision departments should strengthen supervision,release laws and regulations and put forward policy suggestions.